BOSTON — A First Circuit U.S. Court of Appeals panel on March 25 ruled that a federal district court did not abuse its discretion in making a number of rulings during trial leading up to the conviction of an investor on securities fraud charges based on his alleged insider trading in the stock of a pharmaceutical company for which his then-wife worked (United States v. Harold Altvater, No. 19-1101, 1st Cir., 2020 U.S. App. LEXIS 9336).
In a March 24 letter to 10 federal agencies, 47 public interest groups asked the agencies to temporarily suspend any new regulatory rule-making that is not “directly responsive” to the worldwide outbreak of the novel coronavirus with such rule-making activities not to resume until at least a month after the national emergency has been lifted.
DALLAS — A shareholder in a hydraulic fracturing pipeline company on March 25 sued the pipeline company, its officers and an energy company in Texas federal court, contending that they are liable for breach of fiduciary duties related to financial statements made pertaining to the status of a fracking pipeline and for corporate waste with regard to a corruption investigation pending against the pipeline company (Barry King, derivatively on behalf of Energy Transfer LP, v. LE GP LLC, et al., No. 20-719, N.D. Texas).
WASHINGTON, D.C. — U.S. Sen. Richard M. Burr was hit with a shareholder lawsuit on March 23 in District of Columbia federal court, alleging that he violated a federal statute enacted to curb insider trading by members of Congress who use confidential information received in their roles as congressmen for private profit, as well as federal securities law, when he and his wife sold shares of company stock they owned after receiving nonpublic information regarding the United States’ lack of preparedness to handle the spread of the novel coronavirus (Alan D. Jacobson v. Richard M. Burr, No. 20-799, D. D.C.).
NEW YORK — A federal district court properly held that investment funds failed to plead loss causation in arguing that several officers and directors of a regional airline services provider for major airlines misrepresented the extent of its inability to meet contractual requirements with certain of its business partners because the plaintiffs failed to sufficiently show that there was any causal connection between the defendants’ alleged misstatements and omissions and their financial losses, a Second Circuit U.S. Court of Appeals panel ruled March 23 (Axar Master Fund Ltd., et al. v. Bryan K. Bedford, et al., No. 19-1132, 2nd Cir.).
BOSTON — A First Circuit U.S. Court of Appeals panel on March 20 ruled that a federal district court did not err in denying a defendant’s motion for a new trial in a securities fraud criminal action, rejecting the defendant’s argument that the lower court reached its decision after erroneously finding that he failed to sufficiently show that he had received ineffective assistance of counsel in an earlier trial on severed claims (United States v. John Silvia Jr., No. 18-1412, 1st Cir., 2020 U.S. App. LEXIS 8849).
NEW YORK — A federal district court did not abuse its discretion in convicting a former executive officer of a real estate investment trust (REIT) of six counts in connection with his alleged preparation of fraudulent financial statements for the company because evidence submitted by government prosecutors was sufficient for a jury “to find beyond a reasonable doubt” that the defendant’s financial reporting was false or misleading under federal securities law, a Second Circuit U.S. Court of Appeals panel ruled March 19 (United States of America v. Brian Block, Nos. 17-3857 and 19-682, 2nd Cir., 2020 U.S. App. LEXIS 8633).
WILMINGTON, Del. — The Delaware Supreme Court on March 18 ruled that federal forum provisions (FFPs) in the charters of several Delaware corporations requiring that actions arising under the Securities Act of 1933 be filed in federal court are valid and can survive a facial challenge under Delaware law (Matthew B. Salzberg, et al. v. Matthew Sciabacucchi, No. 346, 2019, Del. Sup., 2020 Del. LEXIS 101).
OAKLAND, Calif. — A federal judge in California on March 16 ruled that although the lead plaintiffs in a securities class action lawsuit against graphics processing unit (GPU) manufacturer NVIDIA Corp. and certain of its senior executives have sufficiently pleaded loss causation in arguing that the defendants misrepresented the company’s revenues based on the sale of its gaming GPU to cryptocurrency miners in making their federal securities law claims, the lead plaintiffs failed to plead their claims with the required falsity or scienter (Iron Workers Local 580 Joint Funds, et al. v. NVIDIA Corp., et al., No. 18-7669, N.D. Calif., 2020 U.S. Dist. LEXIS 45259).
MIAMI — A Norwegian Cruise Lines shareholder sued the company and two of its executive officers in Florida federal court on March 12, alleging that the defendants violated federal securities laws by concealing sales tactics conducted by the global cruise line in an effort to entice customers to purchase cruises during the COVID-19 coronavirus outbreak (Eric Douglas v. Norwegian Cruise Lines, et al., No. 20-21107, S.D. Fla.).
PHILADELPHIA — A pharmaceutical company and its CEO violated federal securities laws after misrepresenting to investors that the company had developed a vaccine for the COVID-19 coronavirus when, in fact, it had developed only a precursor for a vaccine, an investor argues in a March 12 class action complaint filed in Pennsylvania federal court (Patrick McDermid v. Inovio Pharmaceuticals Inc., et al., No. 20-1402, E.D. Pa.).
LOS ANGELES — An investor sued a Canadian producer of medicinal-grade cannabis oil and two of its senior executives in California federal court on March 6, alleging that they misrepresented the business and financial conditions of the company’s operations in Columbia in violation of federal securities laws (Daniel Gabbard v. PharmaCielo Ltd., et al., No. 20-2182, C.D. Calif.).
BROOKLYN, N.Y. — A Canadian-based medical cannabis research, cultivation, processing and distribution company and certain of its executive officers violated U.S. securities laws by misrepresenting the financial and business benefits of a marketing and revenue-sharing agreement with another company, causing the company’s stock to trade at an artificially high rate, an investor alleges in a March 6 complaint filed in New York federal court (Chad Ganovsky v. Tilray Inc., et al., No. 20-1240, E.D. N.Y.).
BROOKLYN, N.Y. — An investor on March 11 sued a Canadian firm that invests in medical marijuana companies in New York federal court, alleging that the company and certain of its senior executives misled investors about its revenue recognition causing the company to delay its quarterly and fiscal reports with the Securities and Exchange Commission in violation of federal securities laws (Jill Witte v. Cronos Group Inc., et al., No. 20-1310, E.D. N.Y.).
TAMPA, Fla. — A federal judge in Florida on March 11 ruled that lead plaintiffs in a securities class action lawsuit against a medical technology company and its CEO have sufficiently pleaded the elements of their federal securities law claims in arguing that the defendants concealed negative clinical test results for the use of J-Plasma in cosmetic surgery (Kyle Pritchard v. Apyx Medical Corp., et al., No. 19-919, M.D. Fla., 2020 U.S. Dist. LEXIS 42627).
NEWARK, N.J. — A medical technology company and certain of its senior executives misrepresented and failed to disclose to investors design issues with one of its medical devices that led the company to lower its financial guidance for 2020 and engage in a costly remediation effort in violation of federal securities laws, an investor alleges in a Feb. 27 class action complaint filed in New Jersey federal court (Stephen Kabak v. Becton, Dickinson and Co., et al., No. 20-2155, D. N.J.).
ATLANTA — A federal district court did not err in applying the doctrine of collateral estoppel in a Securities and Exchange Commission civil action against a former senior officer of homebuilder Beazer Homes USA Inc. because each of the elements of collateral estoppel were met barring the district court from relitigating the issue of the defendant’s “intent or good faith,” an 11th Circuit U.S. Court of Appeals panel ruled March 11 (Securities and Exchange Commission v. Michael T. Rand, No. 19-11436, 11th Cir., 2020 U.S. App. LEXIS 7533).
WASHINGTON, D.C. — The U.S. Supreme Court on March 9 declined review of a 10th Circuit U.S. Court of Appeals ruling that a defendant in a Securities and Exchange Commission administrative proceeding failed to properly raise an objection under the appointments clause of the U.S. Constitution pertaining to the constitutionality of the appointment of the administrative law judge (ALJ) who oversaw the administrative proceeding (Dennis J. Malouf v. Securities and Exchange Commission, No. 19-909, U.S. Sup.).
BROOKLYN, N.Y. — Dismissal of claims in an amended shareholder class action against a manufacturer of cannabidiol (CBD) products, its subsidiary and certain of its senior executives is warranted because shareholders have failed to sufficiently plead that the shareholders committed any violations of the federal securities laws that would allow a federal district court to determine that the over-the-counter (OTC) trades of the company’s stock were “domestic transactions” subject to liability pursuant to the Securities Exchange Act of 1934, the defendants argue in a March 6 motion to dismiss filed in New York federal court (In re Curaleaf Holdings Inc. Securities Litigation, No. 19-4486, E.D. N.Y.).
NEW YORK — A shareholder of Bayer AG, the parent of Monsanto Co., on March 6 filed a derivative complaint against Bayer’s chairman and other officials in New York state court seeking damages in connection with Bayer’s acquisition of Monsanto, which the plaintiff says is “a disaster” because the company’s market capitalization has fallen by more than $60 billion following the negative effects of litigation related to glyphosate, the active ingredient in the herbicide Roundup (Rebecca R. Haussmann, derivatively on behalf of Bayer AG v. Werner Baumann, et al., No. 651500/2020, N.Y. Sup., New York Co.).